Home Prices vs Income
Here’s a very interesting exercise from Razib at Gene Expression. First he created a scatterplot “which shows median home value vs. median household income (log-transformed).” Then he color-coded counties according to whether they were above or below the trend line. Deeper blue means you’re expensive relative to income, while deeper red means the reverse. The home price data is from the bubble years 2005-2007:
There’s a fascinating difference here between the west coast and the northeast. The areas right around New York and Boston got very pricey, but pretty quickly the counties turn red again. On the west coast, by contrast, the blue extends quite far into the hinterlands.
That said, the weather is clearly much better on the west coast than on the east coast, so arguably it makes sense that west coast housing should be more expensive relative to economic opportunities.
66 Responses to “Home Prices vs Income”
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August 12th, 2009 at 1:21 pm
It doesn’t have as much to do with the weather – there are plenty of places on the West Coast that have good weather but aren’t so expensive. Rather, West Coast real estate is also heavily impacted in that San Francisco, Los Angeles and Seattle are the preferred locations for many overseas communities (Chinese, Chinese diaspora, Persians, Armenians, Indians, Israelis, Russians, and many others) to purchase US real estate in preference to (most of) the East Coast outside of NYC. Portland isn’t so notably expensive, but Portland is also not a favored location for such overseas buyers.
August 12th, 2009 at 1:27 pm
That said, the weather is clearly much better on the west coast than on the east coast, so arguably it makes sense that west coast housing should be more expensive relative to economic opportunities.
In support of this hypothesis, one might note there is also a light blue band in the Southeast (harder to see).
On the other hand, I’m not sure the weather is really anything close to a complete explanation. A lot of what was going on was driven by good old supply and demand, with a healthy layer of hyperspeculation on top. So Texas forms a reddish break in the Sun Belt, because they already had their boom-and-bust in the 1970s and 80s, leaving them with an oversupply and anti-speculative measures. Meanwhile, the weather in the Northwest really isn’t appreciably better than the weather in the Upper Midwest or Northeast, but they had a relative undersupply and are West Coast blue.
So indirectly, I think it is true that weather-related migrations patterns helped contribute to the supply imbalances that set off the various local housing bubbles. But that is really just one of many contributing factors, and housing bubbles either arose or were prevented despite this weather factor.
August 12th, 2009 at 1:29 pm
From most- to least-affordable:
Industrial Midwest
Northeast
Great Plains
South
Interior West
West Coast
It’s a little surprising to see the map of a phenomenon that doesn’t break down by red state/blue state.
August 12th, 2009 at 1:32 pm
The weather thing is a joke, guys.
Seattle? Portland?
Florida? Virginia?
August 12th, 2009 at 1:35 pm
What about supply and demand? Are there more restrictions on development on the west coast?
August 12th, 2009 at 1:35 pm
Part of the explanation is that western counties are very large in area compared to East Coast counties, making high prices appear to extend further inland.
August 12th, 2009 at 1:39 pm
Matt is right that environmental factors explain this — except that it’s not just “weather” — it’s also the proximity of mountains and relatively unspoiled coastline. But weather too. Minimum winter temperatures and humidity are two huge differences between Pacific and Atlantic coasts. Name any place on the east coast where you can avoid *both* bitterly cold winters and crushingly humid summers.
And #1, ask yourself *why* Persians, Indians, etc. prefer to settle on the West Coast. In the case of Persians, it’s often stated explicitly that LA reminds them of Tehran.
August 12th, 2009 at 1:45 pm
Could we get this map in shades of brown for Steve Sailer’s benefit?
August 12th, 2009 at 1:45 pm
But you can’t escape fires, earthquakes, or drought out West. Your definition of weather is a little narrow I think.
August 12th, 2009 at 1:50 pm
The median incomes in the NE counties has always been higher than the rest of the country. With the exception of the built-up cities like Boston and NYC (and their immediate suburbs), there was still plenty of new housing being built in “outlying” counties back in 2005-2007.
Those high earners bought in Central NJ, Upper Fairfield Cty CT, Hudson Valley NY, etc – either commutable (by train) to NYC or by car to their jobs in neighboring counties.
August 12th, 2009 at 1:51 pm
“And #1, ask yourself *why* Persians, Indians, etc. prefer to settle on the West Coast. In the case of Persians, it’s often stated explicitly that LA reminds them of Tehran.”
It varies, of course. Part of it is that anybody (generally) wants to live where there are some people like them. Armenians have been in California for close to 100 years now. The Chinese have been in California for much longer, but their presence is also driven by such things as the port of Long Beach being the primary shipping hub of the West Coast, which means the import / export business from all of the Far East is in Los Angeles (and not Portland, which isn’t a Pacific Ocean port). Israelis like the Bay Area because there are a lot of technology jobs here, and there are extremely close ties between the leading Israeli universities and the leading Bay Area universities (between Technion and Stanford, for instance). and so on.
August 12th, 2009 at 1:58 pm
Once again a chart displayed on this blog has a lower quality than the chart on the blog Yglesias got it from. It really would be nice if we could click on charts on Yglesias blog and get a higher resolution version.
August 12th, 2009 at 2:04 pm
Meanwhile, the weather in the Northwest really isn’t appreciably better than the weather in the Upper Midwest or Northeast,
Really? Sure, it’s rainier up there, but in general the NW avoids both the harshness of the winters and the muggy humidity of the summers that plague the Midwest and Northeast.
I live in Southern California but actually prefer the weather in the Northwest. But more generally, I can’t stand humidity in the summer, so I prefer everything west of the Rockies to everything east of the Rockies.
The size of the counties does obscure things. Los Angeles County, for example, includes the very unaffordable coastal and nearby valley areas as well as some very affordable desert areas. The former are much more populated, but the latter is where most of the residential units have been selling lately, many off of foreclosures.
August 12th, 2009 at 2:09 pm
David Todd nails it. The only thing this chart shows is that the western counties are huge.
August 12th, 2009 at 2:17 pm
I like New England weather, dammit. If you can’t take occasional blizzards, then get out of the proverbial kitchen.
I’m aware of the very large Armenian community in southern California, but there is also a big one in Boston- Watertown specifically. God Bless Armenia!
August 12th, 2009 at 2:21 pm
Having grown up in the Northwest and now living in the Northeast, yes, the weather is better. A few more days of rain per year is a small price to pay to avoid humid summers. As to the map though, I think the big-counties idea is probably closer to the mark. Still, the general awesomeness of the West Coast versus the rest of the country probably contributes.
August 12th, 2009 at 2:26 pm
I lived in Santa Cruz, CA for quite some time and there were a few things that drove up housing costs:
1. It’s gorgeous – beaches, mountains, redwoods…(not to mention surfing, mountain biking…)
2. The dot com boom gave everyone a lot of money for a while and turned the place into a wealthy suburb rather than a small town former farming community.
3. The mountains hemmed in communities and made sprawl harder
4. Environmentalists were militantly anti-development, so there was always a shortage of housing
5. The UC was larger than the community could really accomodate and constantly growing. It was also the richest UC campus in Cali and many of the students parents just bought them a $500,000 house for a few years and then sold it when school was over – in other words, easy to sell at high prices as new students arrived
August 12th, 2009 at 2:29 pm
Here’s the mystery to me:
According to this map, the Washington, DC suburbs had some of the most affordable housing in America, relative to median household income, from 2005-2007.
This can’t possibly be right. I lived in that area during those years. Houses and condos typically cost 2-3 times more than the equivalent home would in the Midwest. The median household income in Montgomery or Fairfax might have been double the national average, but it certainly wasn’t three to four times higher.
August 12th, 2009 at 2:34 pm
This is pure speculation, but there’s generally a lot more room, period, the West Coast than on the East Coast. Maybe this encourages people to build bigger houses on their bigger lots?
I mean, you could say the same of the plains, but it’s plausible there’s a midwestern cultural inhibition about building ostentatious houses. Incomes are also lower in the midwest generally. So maybe it’s an interaction – you feel compelled to build an outsized house if the space makes it feasible and you’ve crossed a certain threshold of income. Easterners might do the same if there were more room.
August 12th, 2009 at 2:34 pm
That said, the weather is clearly much better on the west coast than on the east coast, so arguably it makes sense that west coast housing should be more expensive relative to economic opportunities.
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Part of it is supply and demand based on the attractiveness of the west coast. In California, regulation plays a big hand. Under the California Environmental Quality Act, most subdivisions require the preparation of an Environmental Impact Report. That can cost millions of dollars that all has to get amortized over the cost of the houses.
California jurisdictions also charge development fees, that in some cases can be equal to the cost of construction. In their current difficulties, some jurisdictions are reducing those to try to get construction back on line
http://www.cbia.org/go/cbia/newsroom/press-releases/two-more-jurisdictions-reduce-development-fees-in-half/
“During the housing boom, many jurisdictions sharply raised the fees they charge new-home builders – and thus new-home buyers – by tens of thousands of dollars per home. The average total impact fee today for each new home is about $50,000 statewide, and there are many jurisdictions where the fees total more than $100,000 – nearly as much as it costs to actually build many homes,” Pattinson said.
August 12th, 2009 at 2:42 pm
#5 – as far as I understand it, there are considerably more land use restrictions along the West Coast that make it much more difficult to build things like apartment buildings or townhouses than there are along the East Coast. So, you ended up with a housing market that demanded more and more units (as people were moving out to Silicon Valley, etc.), but the only new units that could be built were in exurbs.
August 12th, 2009 at 2:48 pm
I’m glad so many Americans are whiny lame-os when it comes to cold weather. It makes some of the best cities affordable. They make really nice coats and warm underwear for A LOT less than the difference in housing prices between Warmtopia and Coldburgh.
August 12th, 2009 at 3:05 pm
I like New England weather, dammit. If you can’t take occasional blizzards, then get out of the proverbial kitchen.
Suffering through a New England winter reminds Hector of the joy he gets from the suffering involved in his religion.
August 12th, 2009 at 3:06 pm
not Portland, which isn’t a Pacific Ocean port
Portland is a port, though certainly not on the scale of LA/LB. Even in depressed times, 8-10 large oceangoing ships cross the Columbia River Bar (one of the scariest stretches of navigable water in the world) on an average day. Most of those are coming to or going from Portland, though Longview, Washington, further downriver, is also a port. The Honda my daughter is buying has a sticker saying it got off a ship in Portland.
August 12th, 2009 at 3:33 pm
Need to size the counties by population size to compare.
August 12th, 2009 at 3:56 pm
Campesino, those fees get amortized away in the money a homeowner saves on property taxes.
August 12th, 2009 at 4:34 pm
Part of it is supply and demand based on the attractiveness of the west coast. In California, regulation plays a big hand. Under the California Environmental Quality Act, most subdivisions require the preparation of an Environmental Impact Report. That can cost millions of dollars that all has to get amortized over the cost of the houses.
A number of others have said similar things about “land use restrictions”. I’d say that’s part of the answer but those explanations obscure more than they illuminate. After all, business development is also subject to California Environmental Quality Act (CEQA), and it is the jobs housing balance that impacts housing prices, especially for major metro areas, like SF or LA.
Those dark blue counties adjacent to San Francisco Bay? Jobs rich, housing poor. Why? Well, a big part of the reason is the tax structure. Silicon Valley towns, like the one I live in, have a strong financial incentive under existing CA tax code to put in more jobs because they provide revenue to provide more services for their residents. Housing is either a money loser for cities or about even, depending on a variety of factors including density. However, additional housing, especially dense housing, tends to attract strong opposition from existing residents. Office parks don’t, especially when they are far from residential areas and city officials point to how much revenue they will generate.
There are countervailing forces on cities that are have been put in to put pressure on local governments to build more housing, but they don’t really have teeth. The money pressures and constituent pressures, which is what really counts, all go the other way.
August 12th, 2009 at 4:42 pm
“Portland is a port, though certainly not on the scale of LA/LB.”
Sure, Portland is a port – but it’s roughly 1/6th or less the size of LA/Long Beach. It’s only 2/3rds the size of Oakland / Richmond, which certainly isn’t a very major port either.
August 12th, 2009 at 4:44 pm
[CEQA] can cost millions of dollars that all has to get amortized over the cost of the houses.
To provide a specific example, there was one proposed housing development, (which was egregiously stupid, but that’s another story), where I was privy to the CEQA EIR costs. They worked out to about $4k per proposed house. Not nothing, but in the land where median house prices are ~$500k, not really a driver. What is the driver? The cost of land. What drives that? The job-housing balance, I argue.
August 12th, 2009 at 5:47 pm
California has a moderately wide strip of superb Mediterranean climate zone that runs from the ocean to the first range of major mountains in Southern California and from the first range to the second range in Northern Californa (e.g., Palo Alto has a nicer climate than foggy Half Moon Bay over the mountains on the Pacific).
There is still an enormous amount of undeveloped land between Santa Barbara and San Luis Obispo, but most of it, other than inland Santa Maria, is locked down tight by the California Coastal Commission and other environmental agencies, so supply is extremely restricted.
The Housing Bubble, in part, consisted of “predatory securitizing” of mortgages on exurban homes outside the Mediterranean climate zone (Bakersfield in the miserable Central Valley, Palmdale in the high desert, the hottest parts of the Inland Empire) on the assumption that just because they were technically within the state of California meant that they were actually in the California! of dreams.
August 12th, 2009 at 5:51 pm
JustMe Says:
August 12th, 2009 at 3:56 pm
Campesino, those fees get amortized away in the money a homeowner saves on property taxes.
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What savings on property taxes? New construction is assessed at market. Houses sold are reassessed at market. Prop 13 doesn’t really help you on taxes unless you hold the house for 10-20 years.
August 12th, 2009 at 5:54 pm
Jeff S. Says:
August 12th, 2009 at 4:44 pm
[CEQA] can cost millions of dollars that all has to get amortized over the cost of the houses.
To provide a specific example, there was one proposed housing development, (which was egregiously stupid, but that’s another story), where I was privy to the CEQA EIR costs. They worked out to about $4k per proposed house. Not nothing, but in the land where median house prices are ~$500k, not really a driver. What is the driver? The cost of land. What drives that? The job-housing balance, I argue
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Well EIR costs can go all over. One I worked on in Santa Barbara County is at around $2M for a 15 house development
August 12th, 2009 at 6:06 pm
It’s common for golf-housing developments in coastal California to take 8 to 15 years to win approval. The TPC Valencia complex was planned in 1985 and opened in 2002. In contrast, the excellent Barona Creek course outside San Diego opened 18 months after it was announced? Why? Because it’s on the Barona Nation Indian reservation, so, due to the Supreme Court’s Bryan ruling, most environmental regulations don’t apply to Indian land.
August 12th, 2009 at 6:15 pm
A great majority of all mortgage dollars lost in the mortgage meltdown are from California, and this map can help you understand that.
First, there’s the dirt gap. Inland metropolises like Dallas and Atlanta can expand in 360 degrees, so there’s twice the supply of developable suburban land. Coastal metropolises are more restricted in dirt for development due to oceans or Great Lakes, with San Francisco as an example of a city hemmed in by water and mountains.
Second, the huge immigration into California drove up demand for housing. In 2000, 26% of California residents were foreign born. In contrast, Texas was 14% foreign born and had vastly more land to develop and many fewer environmental restrictions that kept supply of housing lagging behind demand.
Thus, the Bush-Rove policies of promoting minority homeownership through debauching credit standards weren’t a complete disaster in Texas, the state they understood best. Home prices stayed relatively low. In contrast, the Bush policies proved a colossal disaster in California, a state they didn’t understand.
August 12th, 2009 at 6:15 pm
…but most of it, other than inland Santa Maria, is locked down tight by the California Coastal Commission and other environmental agencies
I don’t know the particulars of SM and SLO counties, but up here in the Bay Area, precisely 0% of Santa Clara County, the largest of those dark blue ones on the map in the state of CA in terms of both land and population, is in the Coastal Zone and therefore subject to Coastal Commission review.
August 12th, 2009 at 6:19 pm
The Coastal Commission is just one of the many, many layers of anti-development regulations in northern California, home to the Sierra Club. It’s simply very hard to get all the approvals to get stuff built in the SF Bay Area.
Thus, the Bubble of new homes 90 miles inland in the Central Valley, for people who think they might want to commute four hours per day to the Bay Area, which is where we’ve seen some of the highest foreclosure rates in the country.
August 12th, 2009 at 6:21 pm
Jeff S. Says:
August 12th, 2009 at 6:15 pm
…but most of it, other than inland Santa Maria, is locked down tight by the California Coastal Commission and other environmental agencies
I don’t know the particulars of SM and SLO counties, but up here in the Bay Area, precisely 0% of Santa Clara County, the largest of those dark blue ones on the map in the state of CA in terms of both land and population, is in the Coastal Zone and therefore subject to Coastal Commission review.
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Point is that it pushes development inland and drives prices up by restricting the supply of available land.
In Santa Barbara County the county zoning along the coast is at least as restrictive as the Coastal Commission. Also Vandenberg AFB takes out a big chunk and if you go inland 3-5 miles you run into Los Padres National Forest.
August 12th, 2009 at 6:25 pm
What’s up with Florida being merely average? Especially South Florida? It was one of the prime bubble areas, and housing prices went through the roof (I lived in Ft Lauderdale 2006-2008). Incomes meanwhile most certainly were not through the roof; Florida in general has very lackluster income stats. Or is the fact that a handful of mega-rich folks like multi-billionaire Wayne Huizinga own houses there skewing the income stats absurdly high?
August 12th, 2009 at 6:36 pm
Now, you can start to see how the Bush-Rove plan to convert Hispanics into Republican voters through both immigration amnesty and letting them borrow on easy terms to become conservative homeowners worked fairly well in Texas, but floundered catastrophically in California. Letting a lot of unskilled illegal immigrants into Texas, a low cost, low tax, low spend, low regulation state, didn’t break the back of Texas’ economy.
In contrast, California is an inherently high cost state due to the limited supply of great land (land much better than anything in Texas). So, California needs high-skilled workers, but decades of lax enforcement of the Mexican border let in lots of illegal immigrants who don’t have the earning capacity appropriate for high cost California. And their children, grandchildren, and great-grandchildren aren’t making all the much more money, either.
Thus, the Bush-Rove plan to encourage Hispanics to borrow and buy houses worked okay in Texas, but proved to be a global disaster in California.
August 12th, 2009 at 6:42 pm
In Santa Barbara County the county zoning along the coast is at least as restrictive as the Coastal Commission.
In many ways, Santa Barbara county is just not typical of urban coastal CA. In land area, it’s large compared to Santa Clara or San Mateo Co’s, but with a population of 400,000, as compared to 2 million in Santa Clara, it’s really in a different category. And compared to the LA, OC or SD counties, the comparison is even more extreme. Santa Barbara is not a jobs driven economy like the Bay Area or the LA/OC area.
August 12th, 2009 at 6:45 pm
The Coastal Commission is just one of the many, many layers of anti-development regulations in northern California, home to the Sierra Club.
…sigh…Steve, the local Sierra Club chapters are huge advocates for infill development in the Bay Area. Do try to keep up.
August 12th, 2009 at 6:56 pm
The savings on the money you’d have to pay if Proposition 13 didn’t exist and the level of property taxes you would have to pay if those fees the developers have to pay didn’t exist.
Property taxes in California are artificially low, so the developers are assessed these fees in order to make up for lost revenue. In exchange for a long term break on your property taxes, you merely pay higher costs up front to pay the bills of the local townships.
August 12th, 2009 at 7:01 pm
Jeff S. Says:
August 12th, 2009 at 6:42 pm
In Santa Barbara County the county zoning along the coast is at least as restrictive as the Coastal Commission.
In many ways, Santa Barbara county is just not typical of urban coastal CA. In land area, it’s large compared to Santa Clara or San Mateo Co’s, but with a population of 400,000, as compared to 2 million in Santa Clara, it’s really in a different category. And compared to the LA, OC or SD counties, the comparison is even more extreme. Santa Barbara is not a jobs driven economy like the Bay Area or the LA/OC area.
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You are correct – but the county’s attitude toward growth and the land locked up by USFS and DoD sort of doubles down on the effect. And believe me, if the people there have their way it will NEVER be a jobs driven economy. The middle class has been squeezed out and lives in Santa Maria, Lompoc or Ventura and commutes in. Oprah and the other rich people are there and their low-paid gardners and domestics live there packed in six to a one bedroom apartment
August 12th, 2009 at 7:03 pm
Again, in my Silicon Valley home town, land in the less desirable part of the city goes for $2M an acre. That’s $240,000 per standard urban CA 5,000 sq ft lot. The Coastal Commission doesn’t have jurisdiction on any land closer than 30 miles from here. Land close to the coast is relatively cheap because the in many cases access to the major jobs centers is poor and it tends to be cold and foggy most of the time as Steve noted upthread, among other reasons. Here in the Valley, the Sierra Club and other environmental groups are advocates for increasing the land devoted to housing and increasing the density of that housing.
The reason the land is $2M/acre is not the CEQA, or the Coastal Commission or the Sierra Club. It has much more to do with the high tech jobs here and because it’s a great place that people want to live in. And the land use incentives that keep jobs relatively plentiful and housing relatively scarce, as I wrote back @27.
August 12th, 2009 at 7:08 pm
There is still an enormous amount of undeveloped land between Santa Barbara and San Luis Obispo, but most of it, other than inland Santa Maria, is locked down tight by the California Coastal Commission and other environmental agencies, so supply is extremely restricted.
Really? The area in the immediate vicinity of Santa Barbara is constrained naturally because there’s only a narrow strip of land between the mountains and the coast. What about the whole Santa Ynez Valley between Vandenberg AFB and Los Padres NF? Further up, the area around Paso Robles and Atascadero would seem to have a lot of developable land, as would the Salinas Valley… there is a lot of space between Salinas and the Monterey/SLO county line.
August 12th, 2009 at 7:10 pm
JustMe Says:
August 12th, 2009 at 6:56 pm
What savings on property taxes?
The savings on the money you’d have to pay if Proposition 13 didn’t exist and the level of property taxes you would have to pay if those fees the developers have to pay didn’t exist.
Property taxes in California are artificially low, so the developers are assessed these fees in order to make up for lost revenue. In exchange for a long term break on your property taxes, you merely pay higher costs up front to pay the bills of the local townships.
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That’s the excuse the cities and counties give. I repeat – it’s not that the taxes are lower, it’s just that they’re locked in until you sell. There is too much new construction and buying and selling of homes to really keep the lid on. For all of the hype about Prop 13, if you look at data it’s surprising how little it appears to have inhibited property taxes in California. If you look here
http://www.boe.ca.gov/annual/pdf/2008/table4_08.pdf
you’ll see property tax levies in CA in 1998 were $21.4 billion. By 2007 they’d risen to $47.2 billion.
August 12th, 2009 at 7:11 pm
if you go inland 3-5 miles you run into Los Padres National Forest.
That’s only true in two places: along the coast near Santa Barbara, and in Monterey County. In both places, the National Forest land is highly mountainous and not really suitable for development anyway.
August 12th, 2009 at 7:12 pm
You are correct – but the county’s attitude toward growth and the land locked up by USFS and DoD sort of doubles down on the effect. And believe me, if the people there have their way it will NEVER be a jobs driven economy.
And these things are synergistic as well. Part of the reason that Oprah and the Hollywood royalty have homes there is because the USFS has provided that pretty backdrop of undeveloped mountains, and that the Dod provides a nice urban buffer. That attracts folks who have the wherewithal and connections to make sure their little paradise stays just how they like it. If those hills were stuffed with litte boxes and the area was just another smog basin like LA, what would be the point of living there, if you’re a celebrity? If that means the domestics and gardeners have to live like sheep, well, as long as it stays out of sight, it’s acceptable.
August 12th, 2009 at 7:17 pm
Really? The area in the immediate vicinity of Santa Barbara is constrained naturally because there’s only a narrow strip of land between the mountains and the coast. What about the whole Santa Ynez Valley between Vandenberg AFB and Los Padres NF? Further up, the area around Paso Robles and Atascadero would seem to have a lot of developable land,
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See #37. Most of the SY Valley, Atascadero, and Paso Robles areas are zoned agricultural and you have a terrible time trying to get zoning changes through Planning Board. Also has the effect of inhibiting any other business grouwth there. Most of the people who live in those areas now have to commute in to somewhere else to work.
Heck, you can’t even cut down trees on your own property there without getting county permits
August 12th, 2009 at 7:20 pm
Jeff S. Says:
August 12th, 2009 at 7:12 pm
You are correct – but the county’s attitude toward growth and the land locked up by USFS and DoD sort of doubles down on the effect. And believe me, if the people there have their way it will NEVER be a jobs driven economy.
And these things are synergistic as well. Part of the reason that Oprah and the Hollywood royalty have homes there is because the USFS has provided that pretty backdrop of undeveloped mountains, and that the Dod provides a nice urban buffer. That attracts folks who have the wherewithal and connections to make sure their little paradise stays just how they like it. If those hills were stuffed with litte boxes and the area was just another smog basin like LA, what would be the point of living there, if you’re a celebrity? If that means the domestics and gardeners have to live like sheep, well, as long as it stays out of sight, it’s acceptable.
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Absolutely. The median home price there is (was?) over $1 million. But the more telling statistic is that something like 45% of the home purchases there are cash deals. Someone comes in and writes a $5 or $10 million check for their new house.
August 12th, 2009 at 7:24 pm
there is a lot of space between Salinas and the Monterey/SLO county line.
If you are talking in the upper Salinas Valley, there’s space there, absolutely. No ocean front real estate for the wealthy to enjoy, though. And kinda desolate. If you wanted to make a major metro area out of, say King City, you’d have to figure out how to get lots of jobs there to attract residence. And oh yeah, you’d have to figure out how to get cheap water there too.
August 12th, 2009 at 7:26 pm
Someone comes in and writes a $5 or $10 million check for their new house.
Must be nice.
August 12th, 2009 at 7:30 pm
Also – two years ago I moved from Santa Barbara County, one of the bluest of the blue on that map to Douglas County in Colorado that has a nice light pink color. It makes me very happy. My house here has appreciated about 15% in those two years in the midst of the melt-down. What’s that old saying – it’s better to be lucky than smart.
August 12th, 2009 at 7:37 pm
See #37. Most of the SY Valley, Atascadero, and Paso Robles areas are zoned agricultural and you have a terrible time trying to get zoning changes through Planning Board.
True. But this makes a crucial difference in where to place the blame. If the problem is planning, the blame can be placed on the local community, the supervisors they elect, and the commissioners the supervisors appoint. In other words, the blame is primarily local, rather than with CEQA, the CA Coastal Commission, the Sierra Club, or any other environmental groups that Republicans like to excoriate.
August 12th, 2009 at 8:01 pm
Adam Villani Says:
August 12th, 2009 at 7:37 pm
See #37. Most of the SY Valley, Atascadero, and Paso Robles areas are zoned agricultural and you have a terrible time trying to get zoning changes through Planning Board.
True. But this makes a crucial difference in where to place the blame. If the problem is planning, the blame can be placed on the local community, the supervisors they elect, and the commissioners the supervisors appoint. In other words, the blame is primarily local, rather than with CEQA, the CA Coastal Commission, the Sierra Club, or any other environmental groups that Republicans like to excoriate.
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I believe you’re a planner aren’t you? Even in the best of situations, CEQA does slow things down, drives up cost and gives a much stronger club for NIMBYS to use – not at all like most places in the country.
That being said, I know from experience that doing an EIR in Kern County and an EIR in Santa Barbara County are two TOTALLY different experiences. We did an EIR for a quarry in rural SB County that took us 2-1/2 years. We were able to do a similar project in Kern as a Negative Declaration in less than 6 months
August 12th, 2009 at 10:37 pm
Your ability to buy a house is based on what you make above and beyond other expenses, not merely on what you make. Non-housing expenses don’t tend to scale fully with either housing costs or median income. Someone making twice as much money might have 4 times as much available for housing costs.
August 12th, 2009 at 10:58 pm
So if I read Sailer’s argument correctly, it is that (1) Hispanic immigrants disproportionately fell prey to native sharpies, and (2) this is further evidence that Hispanics are just naturally dumber than white people.
As an experiment, I would love to dump Sailer and 500 other non-
Chinese-speaking white Americans in the slums of Shanghai with $1000 each in their pockets and no access to the US consulate, and see how many of them have been picked clean at the end of six months.
August 12th, 2009 at 11:55 pm
roac, the non-Chinese speaking white people probably would not fare too well, which is probably the reason millions of English speaking/poor caucasians do not emigrate to China. But millions of poor, non-English speaking hispanics do emigrate to America every year.
Maybe white people are smarter?
August 13th, 2009 at 12:34 am
Even in the best of situations, CEQA does slow things down, drives up cost and gives a much stronger club for NIMBYS to use – not at all like most places in the country.
So having a public process and publicly available environmental documentation serves no public good at all and merely drives up costs and provides a “club for NIMBYS”? Good to know!
Let me guess, your ideal US cities would be Houston and Atlanta?
August 13th, 2009 at 2:57 am
Due to differences in terrain and climate, it is politically inevitable that California will be more restrictive of development than Texas. It doesn’t matter whether you California as environmentally sensitive or denounce it as NIMBYist, it’s just going to be harder to get approval to put up housing in the nice parts of California than in Texas.
These inevitable differences have profound implications for topics like mortgage lending regulation policy and immigration policy. Bush and Rove understood Texas well, and their lax policies on credit and immigration weren’t disastrous for their home state. But they didn’t understand the implications for California.
Unfortunately, I don’t think other people understand the implications either.
August 13th, 2009 at 3:36 am
That being said, I know from experience that doing an EIR in Kern County and an EIR in Santa Barbara County are two TOTALLY different experiences.
Sounds like you and I are in very similar lines of work. I review EIRs for the City of Los Angeles and can assure you that even within this one jurisdiction, the swiftness with which a project moves through the CEQA process is very dependent on who the neighbors are. Single-family houses? Expect a fight. Renters and commercial property? No problem.
Even in the best of situations, CEQA does slow things down, drives up cost and gives a much stronger club for NIMBYS to use
I am a big defender of CEQA (it’s what I work on all day), and even I will concede that this is true. Having a public process, publicly available documentation, opportunities for mitigation measures, alternatives, etc. are all very valuable things. But it’s also true that the value of the process is very dependent on who prepares the document, the policies of the lead agency, the neighbors, the applicant, etc. The state law and guidelines set out a process, but they don’t dictate any specific thresholds of significance. So there is no state agency evaluating whether a particular CEQA document is valid; that’s entirely left up to the courts. And the political environment in Kern and Santa Barbara counties couldn’t be any more different, so you end up with different results. Not coincidentally, Santa Barbara is a much nicer place than Bakersfield.
August 13th, 2009 at 6:50 am
Re: it’s just going to be harder to get approval to put up housing in the nice parts of California than in Texas.
Plus Caifornia construction must meet earthquake safety standards, which is not a problem in Texas. Coastal Texas (I assume) has hurricane safety standards in place, but most of the state probably does not, and at a guess hurricane-proofing(which mainly involves the roof) may add less to the cost of the house than earthquake-proofing does.
August 13th, 2009 at 9:20 am
Problem is this is starting from a faulty premise. We really should be looking at the data that Brookings has been developing, which balances housing cost & transportation cost vs income. Affordability is not a simple measure of housing cost in places where you are forced to drive and spend a larger share of your income on getting around.
August 13th, 2009 at 12:10 pm
Campesino @49,
“Most of the SY Valley, Atascadero, and Paso Robles areas are zoned agricultural”. And that’s a damn good thing! What do you maniac hyper-growthers expect to eat if we pave California from San Diego to Eureka?
Look at the damage to the Central Valley that has occurred from the spillage through Altamont Pass. Yes, the housing bubble has burst in Stockton and Modesto for a while, but large amounts of land has been permanently removed from food production, and sooner rather that later the pressure will begin again.
From your content it’s obvious that you’re in in the real estate development business. While you provide useful data that I expect is quite accurate, your conclusions should be discounted 85% because of it. You want to butter your own toast
August 13th, 2009 at 6:16 pm
Anandakos Says:
August 13th, 2009 at 12:10 pm
Campesino @49,
“Most of the SY Valley, Atascadero, and Paso Robles areas are zoned agricultural”. And that’s a damn good thing! What do you maniac hyper-growthers expect to eat if we pave California from San Diego to Eureka?
Look at the damage to the Central Valley that has occurred from the spillage through Altamont Pass. Yes, the housing bubble has burst in Stockton and Modesto for a while, but large amounts of land has been permanently removed from food production, and sooner rather that later the pressure will begin again.
From your content it’s obvious that you’re in in the real estate development business. While you provide useful data that I expect is quite accurate, your conclusions should be discounted 85% because of it. You want to butter your own toast
============================================================
Wow. No I’m not in real estate development, I’m an environmental consultant. So discount all you want.
Also, as my techncal background is in archaeology, I’ll have to take issue with your characterization of those houses as *permanent*. A 100 years from now, those could be farms again. Good heavens, look at Flint, MI for example, where they are considering tearing down half the city. Your frame of reference is too short
August 13th, 2009 at 6:56 pm
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